Combating Youth Unemployment : The European Perspective and Policy Response

1. Combating Youth Unemployment : The European Perspective and Policy Response Middlesex University London 13 November 2015 Eamonn Davern European Commission Employment Strategy Unit

2. How Serious is the Youth Unemployment Problem? • 5 million under 25 year olds unemployed • 21.4% Youth Unemployment • 44 ppt gap between lowest and highest countries • (EUROSTAT Dec 2014)

3. Macro-Economic Youth Unemployment Factors • • More sensitive to economic cycle • • Young less experienced - more prone to lay offs • • Concentrated in vulnerable sectors • • More likely on short term contracts • • 50% changes in Youth Unemployment cyclical • • Structural changes can be positive , investment in ALMP,education,training/education

4. NEETS in Europe • 7.5 million NEETS (aged 15-24) EU 28 • NEETS aged 15-29 13% (2008) to 15.4% (2014) • (EUROSTAT Dec 2014)

5. Significant Differences across EU NEETs rate aged 15-29 years • Greece 26.7% Luxembourg 6.5% • Italy 26.2% Denmark 7.3% • Bulgaria 24% Netherlands 7.6% • Spain 20.7% Germany 8.7% • United Kingdom 13.4% (10th In EU 28) • (EUROSTAT Dec 2014)

6. European Policy Context (1) • NEET most problematic youth unemployment issue • • Europe (2020) Initiative Youth on the Move • • 2012-2013 Youth Opportunities Initiative • To provide pathways back into education/training and establish labour market contact

7. European Policy Context (2) • European Commission Employment Package • Towards a Job Rich Recovery (2012) • Stressed importance of decreasing NEET rates by enabling transitions to work. • New indicator introduced to monitor NEET situation (from 2014 part of joint employment report scorecard)

8. European NEETS Heteregenous Population • Largest sub-group Conventionally Unemployed • Other NEETs • • Sick and disabled • • Young Carers • • Non-vulnerable NEETS

9. Young people at greatest risk of becomong NEET • • Low levels of education • • Migrant background • • Disability and health problems • • Family issues

10. Social and Economic cost of inactivity • 2011 economic loss (benefits paid – lost output) from youth labour market disengagement Euro 153 billion (1.2% European GDP) • Loss exceeds 2% in Bg Cy Hu Ire It Ltv Pl • Much greater social disengaement • (Eurofund Report 2011)

11. Adverse Consequences for Individual NEETs • • Disaffection • • Insecure future employment • • Higher rates of youth offending • • Mental and physical health problems

12. The Youth Guarantee • Commission Proposal December 2012 • Adopted by Council of Ministers 22 April 2013 • Endorsed by European Council June 2013 • G20 Melbourne September 2014 called for more action on youth unemployment

13. Youth Guarantee Policy Intention • Structural reform to improve school to work transitions and measure to immediately support jobs for young people • Based on successful experience in Finland and Austria

14. Youth Guarantee Commitment • Within 4 months of leaving school or losing job young people under 25 receive either: • • good quality job suiting their education, skills, and experience, • • aquire education, skills and experience required to find a job in the future through apprenticeship, traineeship, or continued education

15. Youth Guarantee Implementation • All Member States have presented Youth Guarantee Implementation Plans • Plans and implementation assessed as part of European Semester (EU re-enforced economic surveillance framework) • Employment Ministers endorsed Youth Guarantee Indicator/Monitoring framework December 2014 .

16. Required Supply Side reforms in Member States • Structural reforms needed include improved : • • ALMP • • Training • • Job – Search • • Education – including combatting early leaving • • Outreach • • Quality and quantity of aprenticeships and VET • • CSRs in 2014 for 8 EU Member States • • PES Reform , co-operation decision May 2014

17. Identification and Activation of NEETs • Tools and Strategies involving all who have access to unregistered young people • Key actors include : Social Services, Education Providers , Youth Associations

18. Youth Guarantee boost for demand for young labour • Temporary well targeted wage and recruitment subsidies • Apprenticeship and traineeship grants • Business development support : • • European Structural and Investment Funds and • European Investment Bank • • COSME Programme

19. Social Investment in Youth Employment • • Youth Guarantee high priority in Partnership Agreements setting Strategic Framework for Structural and Investment Funds 2014-2020 • • Euro 86 billion ESF (Youth Employment measures including Guarantee) • • Supplementary support from Youth Employment Initiative Euro 6.4 billion (targets NEETS – regions exceeding 25% Youth Unemployment (20 MS) eligible

20. Further Initiatives complementing Youth Guarantee • Quality Framework for Traineeships (adopted by Council of Ministers March 2014) • European Alliance for Apprenticeships launched July 2013

21. Key Policy Messages • • Diverse menu of instruments needed • • Labour market readiness of beneficiaries must be considered • • Young people need long –term sustainable pathway • • Involving range of stakeholders in design is essential • • Client centred not provider focussed measures needed • • Success depends upon innovation

22. Thank you for your attention • Questions ?